Smallcap stock jumps 11% after reporting 356% growth in net profit; Announces ₹650 Cr capex

Synopsis:
HEG shares are in focus after a 356% profit jump and a Rs. 650 crore expansion plan to boost graphite electrode capacity by 15,000 TPA.

A leading manufacturer known for its industrial products has reported explosive financial growth alongside major expansion plans. This article details the staggering 356% year-on-year profit jump and the announcement of a significant Rs. 650 crore investment aimed at boosting production capacity to meet rising demand.

HEG Limited’s stock, with a market capitalisation of Rs. 11,404 crores, rose to Rs. 594, hitting a high of up to 11.2 percent from its previous closing price of Rs. 534.25. Furthermore, the stock over the past year has given a return of 32.4 percent.

Guidance

The Board has approved a capacity expansion plan for graphite electrodes and related products, aiming to add 15,000 TPA to the existing 1,00,000 TPA capacity, which is currently utilised at 85% to 90%. The expansion is expected to be completed over 30 months, with an estimated investment of Rs. 650 crore, to be financed through internal accruals and debt if necessary.

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Q1 Financial Update

The company reported a revenue of Rs. 617 crore in Q1FY26, reflecting an 8 percent YoY growth from Rs. 571 crore in Q1FY25 and a 13.9 percent QoQ increase from Rs. 542 crore in Q4FY25. Profit after tax stood at Rs. 105 crore, a strong recovery from a loss of Rs. 74 crore in Q1FY25 and a 356 percent jump from Rs. 23 crore in Q4FY25.

Despite the recent improvement, the company’s 3-year financial performance remains weak, with a negative profit CAGR of -36 percent and a flat sales CAGR of -1 percent. However, return on equity has grown at a 3-year CAGR of 7 percent, indicating some improvement in capital efficiency.

Written By Fazal Ul Vahab C H 

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